Countdown to Ford's Q3 Earnings: How to Play F Stock Ahead of Results

Ford F is slated to release third-quarter 2024 results on Oct. 28, after market close. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and automotive revenues is pegged at 49 cents per share and $41.2 billion, respectively.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The earnings estimate for the to-be-reported quarter has moved south by 1 cent over the past seven days. The bottom-line projection indicates year-over-year growth of 25.6%. The Zacks Consensus Estimate for quarterly revenues suggests almost no change from the year-ago quarter’s figure. Image Source: Zacks Investment ResearchFor the current year, the Zacks Consensus Estimate for F’s automotive revenues is pegged at $170.7 billion, suggesting an uptick of 2.8% year over year. The consensus mark for full-year EPS is $1.86, calling for a 7.5% year-over-year contraction.In the trailing four quarters, this U.S. legacy automaker surpassed EPS estimates on two occasions for as many misses, with the average earnings surprise being 32.32%.Ford Motor Company Price and EPS Surprise Ford Motor Company price-eps-surprise | Ford Motor Company QuoteQ3 Earnings Whispers for FOur proven model does not conclusively predict an earnings beat for Ford this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Ford has an Earnings ESP of +1.22% and a Zacks Rank #5 (Strong Sell).You can see the complete list of today’s Zacks #1 Rank stocks here.Ford’s Key Q3 Metrics to WatchFord’s U.S. sales rose roughly 1% year over year to 504,039 units in the third quarter of 2024. Retail sales increased 4% from the year-ago quarter, thanks to Ford and Lincoln's strategy of offering powertrain options. While internal combustion engine vehicles declined 2.8% year over year, electric and hybrid vehicles witnessed an uptick of 38% and 12%, respectively. Ford was the #3 EV brand in the country in the third quarter, behind Tesla TSLA and General Motors GM. Ford sold 23,509 EVs in the third quarter of 2024 in the United States.Here’s a rundown of the estimates for Ford’s revenues and EBIT for key segments for the three months ended Sept. 30.The Zacks Consensus Estimate for revenues from the Ford Blue unit (comprising ICE and hybrid models) is pegged at $23.78 billion, implying a decrease of 7% year over year. The consensus mark for the segment’s EBIT is $1.87 billion, suggesting an uptick from $1.72 billion recorded in the third quarter of 2023.The Zacks Consensus Estimate for revenues from Ford model e unit (comprising of electric vehicles) is pegged at $1.39 million, implying a decline from $1.75 billion in the corresponding period in 2023. The consensus mark for the segment’s loss before interest and taxes is $1.18 billion, narrower than $1.33 billion in the year-ago quarter.The Zacks Consensus Estimate for revenues from the Ford Pro unit (encompassing commercial vehicles and services) is pegged at $16.6 billion, implying growth of 19.9% year over year. The consensus mark for the segment’s EBIT is $2.1 billion, suggesting an improvement from $1.65 billion recorded in the third quarter of 2023.F Stock Price Performance & ValuationOver the past six months, Ford has underperformed the industry, sector, S&P 500 and its key competitor, GM.6-Month Price PerformanceImage Source: Zacks Investment ResearchFrom a valuation perspective, Ford is trading relatively cheap. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.26, below its median of 0.31 over the last five years. It is also trading at a discount compared to the industry’s 1.57.Image Source: Zacks Investment ResearchFord’s Investment Case: Steer Clear of the StockWhile Ford's Pro business is thriving, the company’s overall outlook is clouded by significant challenges in its other segments, particularly in its EV business. Ford's Model e unit has been a major drag on its financials. The segment’s revenues dropped nearly 50% year over year in the first half of 2024, with an operating loss of roughly $2.5 billion. After having incurred losses of $4.7 billion in its EV business in 2023, Ford anticipates loss to widen to $5-$5.5 billion this year, exacerbated by ongoing pricing pressure and increased investments in next-generation EVs.Ford’s Blue unit is also showing signs of slowing down. Additionally, high warranty costs present a persistent issue, with the company incurring $2.3 billion in warranty and recall expenses in the second quarter of 2024. While Ford is working on improving quality in newer models, it may take up to 18 months before these efforts begin to meaningfully reduce costs. Unfortunately, this means that Ford could continue to face elevated warranty expenses for some time.Although Ford appears undervalued and offers a high dividend yield, these factors do not outweigh the growing financial pressures and operational headwinds the company is facing. Amid mounting losses in its EV segment, ongoing warranty costs and competitive challenges, especially in the EV business, the stock remains unattractive in the near term. Investors are better off avoiding Ford for now as the company works through these issues.Infrastructure Stock Boom to Sweep AmericaA massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.The only question is “Will you get into the right stocks early when their growth potential is greatest?”Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks